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Economics For Everyone ­ Milky WayProf. M. Guruprasad, AICAR Business School | Mumbai | December 07, 2015 15:55 IST

Economics For Everyone ­ Milky Way

News: Google Doodle pays tribute to Verghese Kurien Kurien’s ‘White Revolution’ gave India the identity of being the largest producer of milk in the world. National Milk Day on Kurien's birth anniversary Introduction:

The programme adopted to increase the production of milk is known as White Revolution inIndia. The White Revolution in India occurred in 1970, when the National Dairy DevelopmentBoard (NDDB) was established to organise the dairy development through the co­operativesocieties.Dr. Verghese Kuerin was the father of White Revolution in India. The dairydevelopment programme through co­operative societies was first established in the state ofGujarat. The co­operative societies were most successful in the Anand District of Gujarat. Theco­operative societies are owned and managed by the milk producers. These co­operatives apartfrom financial help also provide consultancy. The increase in milk production has also beentermed as Operation Flood.

Operation Flood, launched in 1970 is a project of the National Dairy Development Board (NDDB), which was the world's biggest dairydevelopment program, that made India, from a milk­deficient nation to the world's largest milk producer, surpassing the USA in 1998, withabout 17 percent of global output in 2010–11, which in 30 years doubled milk available per person, and which made dairy farming India’slargest self­sustainable rural employment generator. It was launched to help farmers direct their own development, placing control of theresources they create in their own hands. All this was achieved not merely by mass production, but by production by the masses. The Anand pattern experiment at Amul, a single, cooperative dairy, was the engine behind the success of the program.Verghese Kurien wasmade the chairman of NDDB by the then Prime Minister of India,Shri Lal Bahadur Shastri, and he was the chairman and founder of Amulas well. Kurien gave the necessary thrust using his professional management skills to the program, and is recognised as its architect.

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Indian Dairy Industry: Today, India is the centre of the global dairy industry. It is the largest producer of Milk in theworld The Indian dairy industry is rapidly growing. India had tremendous milk production in 40 years and has become the world's largest milk­producing nation with a gross output of 84.6 million tons in 2001 and an annual output of 130MT (2014­15). India is the largest producer of the milk in the world. It also has the largest milk­producing animal population of over 118 million. According to the National Dairy DevelopmentBoard, demand for milk is expected to increase at a compound annual growth rate or CAGR of5% from 130 million tons in 2014 to 200 million tons in 2022. The move towards value addeddairy products, offer higher margins than liquid milk for the Indian Milk Industry. According to

a report by CARE Ratings, the share of value added products in the milk and milk derivatives segment in India is growing at around 25%every year and is expected to grow at the same rate until 2019­20. The Indian Dairy Industry has achieved this strength of a producer­ownedand professionally­managed cooperative system, despite the facts that a majority of dairy farmers are illiterate and run small, marginaloperations and for many farmers, selling milk is their sole source of income. More than 10 million dairy farmers belong to 96,000 localdairy cooperatives, who sell their products to one of 170 milk producers' cooperative unions who in turn are supported by 15 statecooperative milk marketing federations. The Indian Dairy Industry engages in the production and processing of milk & cream. This industry is involved in the manufacture ofvarious dairy products like cheese, curd, yoghurt etc. The Indian Dairy Industry specializes in the procurement, production, processing,storage and distribution of dairy products. India as nation stands first in its share of dairy production in the international scenario and makesimportant contributions to the national economy. The Indian Diary industry provides gainful employment to a vast majority of the ruralhouseholds. Given its high income elasticity, the demand for milk and dairy products is expected to grow rapidly. India accounts for about 56 per cent of the cattle population of the world's buffalo population and 14 per cent of the cattle population. Itranks first in respect of buffalo and second in respect of cattle population, second in goat population and third in respect of sheep in theworld.

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Operation flood or White Revolution: Operation Flood had created a national milk grid linking milk producers throughout India with consumers in over 700 towns and cities,reducing seasonal and regional price variations while ensuring that the producer gets a major share of the price consumers pay, by cuttingout middlemen. By reducing malpractices, it had helped dairy farmers direct their own development, placing control of the resources theycreate in their own hands. Operation Flood's objectives included: • Increase milk production • Augment rural incomes • Fair prices for consumers Operation Flood was implemented in three phases. Phase I (1970–1980) was financed by the sale of skimmed milk powder and butter oil donated by the European Union (then the EuropeanEconomic Community) through the World Food Program. NDDB planned the program and negotiated the details of EEC assistance. Duringits first phase, Operation Flood linked 18 of India's premier milk sheds with consumers in India's major metropolitan cities: Delhi, Mumbai,Kolkata and Chennai. Thus establishing mother dairies in four metros. The Operation Flood – 1 originally meant to be completed in 1975, actually spanned the period of about nine years from 1970–79, at a totalcost of Rs.116 crores. At start of operation Flood­1 in 1970 certain set of aims were kept in view for the implementation of the programs.Improvement by milk marketing the organized dairy sector in the metropolitan cities Mumbai, Kolkata, Chennai and Delhi. The objective

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was to gain commanding share of milk market and speed up development of dairy animals respectively hinter lands of rural areas with aview to increase both production and procurement. Operation Flood Phase II (1979–1985) increased the milk­sheds from 18 to 136; 290 urban markets expanded the outlets for milk. By theend of 1985, a self­sustaining system of 43,000 village cooperatives with 4,250,000 milk producers were covered. Domestic milk powderproduction increased from 22,000 tons in the pre­project year to 140,000 tons by 1989, all of the increase coming from dairies set up underOperation Flood. In this way EEC gifts and World Bank loan helped promote self­reliance. Direct marketing of milk by producers'cooperatives increased by several million litres a day. "RAKSHA" vaccine developed for cattle health. Phase III (1985–1996) enabled dairy cooperatives to expand and strengthen the infrastructure required to procure and market increasingvolumes of milk. Veterinary first­aid health care services, feed and artificial insemination services for cooperative members were extended,along with intensified member education.

Operation Flood's Phase III consolidated India's dairy cooperative movement, adding 30,000 new dairy cooperatives to the 43,000 existingsocieties organized during Phase II. Milk­sheds peaked to 173 in 1988­89 with the numbers of women members and Women's DairyCooperative Societies increasing significantly. Phase III gave increased emphasis to research and development in animal health and animalnutrition. Innovations like vaccine for Theileriosis, bypassing protein feed and urea­molasses mineral blocks, all contributed to the enhancedproductivity of milk producing animals. Milk production and consumption trends in India: 1950­51 to 2001­02

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Achievements White Revolution is as important to dairy development as Green Revolution has been to grain production. Its outcome is based on theimprovement in cattle breeding and adoption of new technology. Some of the important achievements of the White Revolution are as under: 1. The White Revolution made a profound impact on rural masses and encouraged them to take up dairying as a subsidiary occupation. 2. India has become the leading producer of milk in the world. The milk production that was about 17 million tons in 1950­51 rose to over105 million tons in 2007­08. The production of milk has gone up by more than six times when compared with that of the Pre­Independencesituation. 3. The per capita availability of milk per day at present is about 200 gm as against 100 grams before the White Revolution. 4. The import of milk and milk production has been reduced substantially. 5. The small and marginal farmers and the landless labourers have been especially benefitted from the White Revolution.

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6. To ensure the success of Operation Flood Programme, research centres have been set up at Anand, Mehsana, and Palanpur (Banaskantha).Moreover, three regional centres are functioning at Siliguri, Jalandhar, and Erode. Presently, there are metro dairies in 10 metropolitan citiesof the country, beside 40 plants with capacity to handle more than one lakh litres of milk. 7. The government implemented livestock insurance on pilot basis in 2005­06. 8. To improve the quality of livestock, extensive cross breeding has been launched. 9. For ensuring the maintenance of disease­free status, major health schemes have been initiated.

AMUL

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Amul's success had huge impact in the creation of same structure of milk producers in other districts ofGujarat initially. Amul's experience was driving force in project planning and execution. The 'AnandPattern' was followed in Kaira district, Mehsana, Sabarkantha, Banaskantha, Baroda and Surat districts.As even before the setting up of the Dairy Board of India, farmers and their leaders carried out varioustests of the hypotheses that explained Amul's success. All through these districts, milk producers andtheir leaders experienced significant commonalties and found easy, effortless ways to adapt Amul'sgameplan to their respective areas. This eventually led to the Creation of the National DairyDevelopment Board with the clear mandate of replicating the 'Anand pattern' in other parts of the

country. Initially this pattern was followed for the dairy Industry but at later stage oilseeds, fruit and vegetables, salt, and tree sectors alsobenefited from its success. Background: Shri Lal Bahadur Shasri, the then Prime Minister of India, visited Anand in 1964 for inauguration of the Cattle Feed Factory of Amul atKanjari. As he was keenly interested in knowing the success of this co­operative, spent a whole night with farmers in a village, even haddinner with a farmer discusses his wish to Mr Verghese Kurien, then the General Manager of Kaira District Co­operative Milk Producers’Union Ltd (Amul) to replicate this model to other parts of the country for improving the socio­economic conditions of farmers. As a resultof this visit, the National Dairy Development Board (NDDB) was established at Anand in 1965 and by 1970 it launches the dairydevelopment programme for India – popularly known as Operation Flood. The Prime Minister also wrote to the Governors of all the Sates inIndia.

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The White Revolution is the achievement of Kaira district milk producers and co­operative union which owns and operates the Amul dairy.In many villages separators had been set up, which created the problem of surplus skimmed milk for which there was no use. A Germansolved this problem around 1909 when he began preparing casein and exported it to Germany where it found many industrial uses. But hewas arrested during World War I. But he had shown the way to an enterprising young Parsi, Pestonji Edulji Polson, who in order to meet thearmy demand for butter started manufacturing it in about 1915. By 1930, Polson set up a model dairy at Anand, and built up a lucrativebusiness, enjoying a monopoly for many years. The current phase of Kaira's dairying movement had its beginning around 1942, when a Russian opened up the possibility of sending'cooled' milk to Bombay, which was soon to develop into a big consuming centre for Anand milk. The Amul dairy is an indispensable adjunct of the Anand union. In July 1948, Amul started as a milk pasteurisation plant to help theBombay milk scheme meet its milk requirements. The production did not exceed 500 lbs a day. A turning point came in 1953. The winterproduction being 250% of the summer, Amul found surplus supplies on hand. The farmers demanded of the union an assurance to provide them with a year­round market. Such a demand could not have been met unlesssurplus milk was converted into dairy products. Two years' planning brought into existence a `50­lakh dairy factory. Monetary assistancecame from Unicef and New Zealand which proved a great incentive and more milk producers' village co­operative societies came to beorganised.

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Dr. Verghese Kurien Verghese Kurien (26 November 1921 – 9 September 2012) was an Indian social entrepreneur known as the "Father of the WhiteRevolution" for his Operation Flood, the world's largest agricultural development programme.This transformed India from a milk­deficientnation to the world's largest milk producer, surpassing the United States of America in 1998, with about 17 percent of global output in2010–11, which in 30 years doubled milk available to every person. Dairy farming became India's largest self­sustaining industry. He madethe country self­sufficient in edible oils too later on, taking the powerful and entrenched oil supplying lobby, head­on.

He founded around 30 institutions of excellence (like AMUL, GCMMF, IRMA, NDDB) which are owned, managed by farmers and run byprofessionals. As the founding chairman of the Gujarat Co­operative Milk Marketing Federation (GCMMF), Kurien was responsible for thecreation and success of the Amul brand of dairy products. A key achievement at Amul was the invention of milk powder processed frombuffalo milk (abundant in India), as opposed to that made from cow­milk, in the then major milk producing nations. This led the then PrimeMinister of India Shree. Lal Bahadur Shastri to appoint him the founder­chairman of National Dairy Development Board (NDDB) in 1965,

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to replicate Amul's "Anand model" nationwide. He is regarded as one of the greatest proponents of the cooperative movement in the world,his work having lifted millions out of poverty in India, and outside.

IRMA ­Institute of Rural Management AnandAMUL­ Anand Milk Federation Union Limited hence the name AMUL. Formed in 1946, it is a brand managed by a cooperativebody, the Gujarat Co­operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.6 million milkproducers in Gujarat.

He experimented with ways to produce milk powder from buffalo milk. This culminated in the establishment of India's first ever milkpowder plant. The plant, upon Kurien's request, was inaugurated by the then Prime Minister Pt Jawaharlal Nehru on October 31st, 1955. TheWhite Revolution started by him led to the development of Mother Dairy. Shyam Benegal's film 'Manthan,' a story set in India's milkcooperative movement, was funded by the farmers working for Dr Kurien. He received many awards, including the Padamshri (1965) andthe Padmabhushan (1966). Because of his invaluable contribution to the dairy industry, his birthday, the 26th of November, is nowcelebrated as National Milk Day.

Some more Facts about Indian Diary Industry: 1. India is the world’s biggest producer and consumer of dairy. 2. Price volatility is yet to arrive. The dairy sector is protected from foreign imports and prices paid to GCMMF’s farmers are rising about9% a year. 3. The GCMMF is made up of 3.6 million farmer members, structured through a network of village co­operatives and district groups.

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4. Milk production costs are almost competitive with the likes of Australia and New Zealand. 5. India has 300 million bovines. One­third are buffalo, which provide 55% of the milk. 6. The average net income for a dairy farmer is US$387 (£247) a cow each year. That is not much when you’ve only got one or two animals. 7. Dairy farming is mainly a woman’s game. They look after the livestock while men typically find a wage beyond the home. 8. Indian farmers receive 80­86% of every rupee spent on milk by consumers. This is due to supply chain efficiency and very few bigretailers. British farmers’ share of the on­shelf price is about 36%. 9. The most popular way to buy milk is in plastic pouches. Under the Amul brand, the GCMMF sells 20m every day. Ghee, a kind ofclarified butter, is their next top product. 10. India has around 30 different breeds of cow from Punjab to Kerala. Sources: Economic Times The Hindu Amuldairy NDDB World Bank FAO (Food and Agricultural Organisation of United Nations) Wikipedia

Prof. M. Guruprasad,AICAR Business School

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